Grunge hair is the hairstyle of someone who is into grunge music (such as Nirvana, Pearl Jam and Soungarden) and is a proper grunger. Their hairstyle will be long and straggly, perhaps covering a large part of their face.
Tarquin: Wow, you're hair's so messy and cool!
Pablo: Oh, thanks mate.
Tarquin: You must be a grunger with that grunge hair.
Pablo: Yeh, I'm so into grunge. Might as well have the grunge hair too.
Tarquin: Let's go and make fun of some emos!